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Research Conclusion Research Limitation

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CHAPTER V CONCLUSION AND LIMITATION

5.1 Research Conclusion

Equity value is very important for a company because it reflects the performance of the company in a public. One of the factors that can affect and has strong relations with the equity value is earnings. Beside earnings and equity value, the companys investment growth which can give contingency effect is also a factor that can affect the value of the company. This research aims to give empirical evidence about the influence of investment growth on relation between equity value and earnings in all listed companies in Indonesia from 2008-2011. According to the the description and data analysis which have been described in the previous chapter, the objective of this research aims to test the effect of investment growth in the relation between earnings and equity value. Investment growth is measured by Investement Opportunity Set IOS because when the company has high opportunity for growth, it assumes that company also to do investment growth Hasnawati, 2005. This study used pool data on a sample of 255 manufacturing companies listed on Indonesian Stock Exchange during 2008 until 2011 which meets the sample criteria. The result of this research shows that the hypothesis is accepted. This finding is consistent with research conducted by Hao et al. 2011. 53 Their result said that investment growth is positively affect the relation of equity value and earnings. The investment growth in this research is strengthen the earnings in affecting equity value. This result means that the investment growth affects the relation between earnings and equity value. The regression result of this study shows that investment growth has positive effect to the relation between earnings and equity value.

5.2 Research Limitation

This reseach has some limitation due to the limit of the availability of the financial statements and the closing price because the publication date some of companies were not available. There are a lot of financial statement data which already damaged. To measure the investment growth, this research only use investement opportunity set as proxies, and the writer use only the investment proxy. Therefore, this research cannot compare with the other measurements of investment growth.

5.3 Suggestion for Future Research

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